First cut } BPCL Q3FY19 – weak performance, inventory losses impact margins

Bharat Petroleum Corporation | State-owned oil refinery and marketing company BPCL said board of directors of the company has approved the Scheme of Amalgamation of natural gas firm Bharat Gas Resources with the company. As Bharat Gas Resources is a wholly owned subsidiary of the company, the company is neither required to comply with the requirements laid under SEBI Master Circular nor required to obtain observation letter or no objection letter from the stock exchanges before filing the Scheme with MCA. The news came in after market hours on March 22. The stock closed 1.45 percent higher at Rs 439.35 on March 22. It hit a 52-week high of Rs 482.40 on March 2, 2021, and a low of Rs 252 on March 24, 2020. The market-cap of the company stands at Rs 95,306.12 crore. In terms of technicals, the current rating by Moneycontrol on the stock is Neutral. The important support levels for the stock are placed at Rs 421.97-410.98, while resistance is placed at Rs 441.17-449.38, data from Moneycontrol.com showed.

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26 Aug, 2025 12:21

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Ruchi AgrawalMoneycontrol Research

After weak results from Indian oil corporation (IOCL) and Hindustan petroleum corporation (HPCL), Bharat petroleum corporation (BPCL) also reported a weak performance in Q3. Despite an uptick in revenue, the operating and net margins declined sharply both year-on-year and sequentially. Gross refining margins (GRMs) dipped in line with global margin contraction. Substantial inventory losses ate away the quarter’s profitability.

-GRMs for the nine months from April to December were at $5.25 per barrel (9MFY18: $6.97). GRM for the quarter was $2.78 per barrel (Q3FY18: 7.89), a sharp dip YoY. While there has been a weakness in GRMs globally with the Singapore benchmark at $4.5 per barrel (Q2: $6.1), BPCL’s GRMs saw a much greater impact

-Earnings before interest, tax, depreciation and amortisation (EBITDA) declined 77 percent YoY (-69 percent sequentially) due to high inventory losses, and input costs, employee expenses and finance costs.

-A sharp uptick in crude prices since October 2018 led to high inventory losses during the quarter which was single main reason for the contraction in profits and margins. This also indicates a not-so-weak core performance.

-Other expenses includes a foreign exchange gain during the quarter of Rs 659 crore (Q3FY18: Rs 172 crore gain) which led to a noticeable decline in the expenses.

-Volumes in the export business grew 55 percent sequentially (YoY: +36.2 percent)

-Domestic volumes were largely flat YoY, while there was 6 percent sequential improvement

-The overall performance of the company appears weak much in line with expectations and other oil marketing companies. With volatile crude prices, upcoming central elections and tweaking of marketing margins around elections, we remain cautious on the company’s performance.

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